The Lean Sigma Scorecard Framework

Leadership communicates a clear vision of creating an injury-free workplace and spells out a strategy of how to get there.

• By Peter Furst
• Jan 02, 2008

The Lean Sigma Scorecard brings together the best of Lean Enterprise thinking, Six Sigma processes, and the Balanced Scorecard’s multiple perspective management. It combines the use of data to deploy strategy and drive improvement, as well as streamlining internal processes and procedures to maximize efficiency. The Lean Sigma Scorecard framework is uniquely positioned to address many of the shortcomings in traditional safety management.

The Balanced Scorecard has become the mainstay of business management since it was introduced in 1992. Today, just about all the Fortune 500 companies, as well as others, have some sort of scorecard with which their business is managed. The innovation of the Balanced Scorecard was that it proposed managing the business through a number of critical perspectives so as to have real-time information to respond to changing conditions and meet customer needs.

Six Sigma is a widely used, data-driven quality improvement process. Six Sigma has been successfully used by a number of multinational organizations in not only improvement of operations, but also outstanding safety outcomes. Manufacturing uses a discipline called Lean (Lean Manufacturing) that focuses on process speed and efficiency. This process has assisted a number of innovative organizations in garnering tremendous efficiencies in their operations, as well as becoming more nimble in product and process innovations.

The foundation on which the Lean Sigma Scorecard concept rests is a culture that is supportive of an injury-free workplace, as well as a climate that fosters cooperation of all the people within the organization to that end. The organization holds an injury-free workplace as a core value, and the people operate on this premise instinctually. The leadership communicates a clear vision of creating an injuryfree workplace and spells out a strategy of how to get there. To accomplish this, the organization must deploy strategy based on data and information, and the data should be utilized to drive the “right” organizational behavior so as the make the injuryfree workplace vision a reality.

The four cornerstones of the Lean Sigma Scorecard are stakeholder focus, internal organizational systems, operational processes, and fundamental safety procedures. These rest on a supportive culture and are driven by data and information. The stakeholder cornerstone looks at the needs of all of the organization’s stakeholders and tries to address them. Aligning the organization’s systems, supported by integrated operations and driven by data collected from the stakeholders, results in a 360-degree, holistic approach to the creation of an injury-free workplace.

This then feeds into a larger system of customers, competition, communication, finance, banking, etc., to name a few. All of these in some way exert some degree of influence on the decisions the workers make every day in performing their tasks, influenced by the actions and behaviors of supervision and management. (Some of these decisions, if made without an understanding or appreciation for the complex systems at work, may lead to incidents and possible injury and losses.)

Safety and the Lean Sigma Scorecard
Measurement is necessary to effectively manage. Senior management understands this well, knowing that the measurement system influences and drives organizational behavior. Effective measurement has to be predictive as well as prescriptive in nature if it is to provide data and information for managing performance. Many organizations have discovered that measurement is difficult because it is not an exact science. There are no hard-and-fast rules of how to go about creating metrics that provide the critical information necessary to manage effectively.

To make things more complicated, it is difficult to predict the impact on individual behavior and the interactions and interrelationships among existing diverse variables and new ones produced by the new metrics. This is because people are involved, and their actions are inherently unpredictable. Another thing that contributes to the complexity is that important factors often are hard to measure consistently and objectively. To effectively measure this, variability must be designed out of the system.

The Lean Sigma Scorecard provides real-time information of what needs to be addressed in order to improve safety results. Traditionally, to improve safety, we analyze our losses and from this we arrive at a plan to change some aspect of the effort going forward. This analysis establishes our improvement strategy and sets the direction as to what needs to get done to improve the loss picture and control the cost-of-risk.

This method of arriving at a strategy may not necessarily be in alignment with overall operational goals and/or business objectives. This, too, creates some of the difficulty safety faces in the business environment. Site audits also become the source of information that drives improvement strategy. Both audits and loss analysis may not provide the true picture of what exactly is driving the undesirable results by ignoring all system drivers. This approach is out of alignment with the operational, business, and organizational measurements used to manage the business. Integrated and aligned metrics will show managers that safety in fact has the “right” strategy in order to get the results needed or expected.

This article originally appeared in the January 2008 issue of Occupational Health & Safety.